Big Data Trends – are advertising agencies losing the battle?

Most of the advertising world is converging on the South of France this week for Cannes Lions 2018, an annual festival celebrating the work of creative agencies. Now in its 64th year, the event has been facing increasing questions regarding its relevance in the fourth industrial revolution. Last year, advertising giant Publicis Groupe announced that they were pulling out of this year’s festival; meanwhile the likes of Accenture, IBM and other business consulting practices are doing the opposite and scaling up their presence.

So, what’s going on?

Well the answer is data. Yes, nothing new I hear, but it’s the battle for data that is driving a paradigm shift in the advertising industry. As a marketing strategist, the first stage in creating a strategy is to carry out analysis; for market research this traditionally takes the form of surveys and focus groups. However, the trouble with data captured through this process is that there is a danger that it will be skewed by social desirability bias. In other words, people are prone to lie, to look good, even when they complete questionnaires anonymously and particularly on social media like FaceBook and Instagram.

Whereas, when people use search engines like Google, their behaviour tends to give up their deepest darkest secrets – almost a confessional. Of course, you could argue that some people lie to themselves, but the data will probably reveal the truth. And it’s this ‘BIG’ data that everyone is getting excited about. Data scientists are running all sorts of testing and hypotheses for big brands as they try to understand how their target audiences think and behave and provide products and services that solve their problems.

The marketing teams within big brands have never been busier, managing all this data and trying to spot useful insights and relevant trends. Data has become central to marketing operations and this has not gone unnoticed by large business consultancies like Accenture and IBM. These companies see an opportunity to provide brands with the IT systems to run data tests, and automate marketing tasks, thereby allowing marketing teams to have more time to be… ‘strategic’.

So where does this leave the traditional advertising agencies?

For years advertising agencies have worked symbiotically with the big brands’ marketing departments; creating and implementing marketing campaigns that answered the marketing brief and objectives. Well, so far, they have been left a little on the side lines, with corporate brands like Proctor & Gamble, Unilever, Nike and Royal Bank of Scotland taking more tasks back in-house. In China for example, P&G “is using one of the country’s largest data-management platforms alongside its own proprietary measurement system to do better propensity modelling and frequency capping on more nuanced audience segments.’ (Digiday).

However, the rise in data management is not the only driving factor; brands are looking to streamline their processes to ensure return on investment, which means even more tasks are being taken back in-house. The inevitable effect is that traditional agencies will see revenue streams decline and will need to plug these with new services for their clients. Hmmm… maybe they need a marketing strategist…